Skip to main content

tv   Closing Bell  CNBC  March 11, 2013 3:00pm-4:00pm EDT

3:00 pm
getting better. i'm going to do some cool stuff on tractors. it's going to be very cool. only problem is i got to go to vegas. >> you won't go out after the show, will you? >> no. because i'll be on a flight back because i'm here thursday. >> going to keep you straight. on the straight and narrow. coming up, last week we told you about the worries about a possible ferrari bubble. this weekend a bunch of them went on the auction block. cnbc world editor robert frank tells us how they did. bubble or no bubble? >> if there was a bubble there's no sign it's going to pop any time soon. at least over the weekend. at the amelia island concord this weekend the two auction companies sold $53 million worth of vintage cars. well below last year's total of 59 million tl$59 million. there were also fewer cars. the top seller was not a ferrari, it was a 1935 duesenberg. the runner up was a bentley. a 1928 le mans tourer. all of the ferraris sold for
3:01 pm
their estimates including the number three car, 1966275 gtb. 2.3 milli$2.3 million. one of the porsche's did not sell at the minimum price. and a tucker. the car had added film history. george lucas was once a previous owner. apparently the force was not with the current seller. you can read the full list of top selling cars on >> why do you think? were they too expensive? >> the top cars selling now are the european racers. the porsche was not street legal. if you can't drive it around it's just not worth as much. >> i think the next hot brand of cars is going to be the import. like a 1972 40-z. they're not going to go to these levels. but i think that's a group of cars that's been ignored for a long time. there's some really cool cars. datsun blackbirds.
3:02 pm
known as the 510. >> more money than cars. >> thanks for watching "street signs," everybody. >> "closing bell" is next. see you tomorrow. hi, hi, everybody. happy monday. another winner on wall street. welcome to the "closing bell." i'm maria bartiromo. the dow trying for the seventh straight winning session and fifth straight all-time high. >> never gets old, right? >> amazing. >> still going at it. i'm bill griffeth. on today's program a market that will not quit. a weak start for stocks this morning with the market gains in the rear-view mirror. we're also on s&p watch right now. we've been talking all about the dow the last week. right now the s&p is about 10 points away from its all-time high. 1565.15 is the number to keep an eye on. >> we know what the russell 2,000 has been doing.
3:03 pm
the white house warning china on hacking the presidential's national security adviser with strong words from beijing saying its disregard for cyber laws is damaging the economic relationship between the two countries. we'll take you live to washington for the very latest there. >> very, very important story. also, dick kovasevich is back with us today chiming in on our favorite story. the growing influence of activist investors. we've seen them with disney, herbal life. you can go on and on opinion banks have been a target of activist investors. dick will tell us how he would handle it. i imagine it wouldn't be very quietly. >> jack welch had a problem as well. back of the hand for apple and tim cook. we'll find out what dick has to say. let's take a look at where we stand right now. we are at the highs of the afterno afternoon. 14,435. last trades today on the dow, that would be an all-time high if we closed right here.
3:04 pm
nasdaq up 5.5 points. fractional move. tech one of the winners. more of a mixed story. s&p 500 up 4.25 points. .25% higher at 1555. >> we are aware of that pop in apple that's causing the nasdaq to move higher. we'll have more on that in a moment. first in today's closing bell exchange, danny hughes from divine capital, lee munsen, portfolio asset management and our own rick san tetellsantelli. lee munsen, even at these levels you feel we're in a sweet spot for investing in equities. why? >> number one investors never want to invest when unemployment is high or when the p.e. ratios are low. right now you still have a good level of high unemployment which would bode well for the out years of investing as well as valuations. the sweet spot, bill, is that the public feels things are really getting better when really all that's happening is that the valuations are still good. so i want to encourage everybody
3:05 pm
to believe the lie that we're really making a lot of new jobs and invest their money accordingly. >> oh, he's so cynical danny. >> you know -- >> cam passionate cynicism. >> it is true investors haven't believed the hype yet. we haven't seen the great turnover we've expected to see. who knows if they're going to join the party now or if the party hasn't really started yet? we don't even know. investors have taken out $556 billion since 2007. and we really haven't seen any of that come in. it was still january when we started seeing money come back into etfs and mutual funds. that's where they're coming back in. they're not jumping back into the stock market. there's no day traders anymore, people. we're not seeing the pops in stocks that we used to. >> that sounds like, don, there could be a lot of further potential to the upside when and if that retailer investor gets in with both feet. what to you see? >> we see the market's pretty
3:06 pm
reasonab reasonably valued right here. this market if money starts falling in valely going to pop. the economy is better than we thought it was all last year. the analysts keep driving down the expectations. but the economy and corporate earnings start to look really good. fourth quarter reversed the negative trend that we had from second and third quarter. so we think the market's got room to run. but typically investors get in as the market gets fully valued and they get caught in that trap where they buy high and sell low. and we think that they have to be careful this time as the markets start to move ahead of the fundamentals and pricing gets too generous. >> does that mean you would be selling into this rally right here? >> no, we wouldn't be selling into the rally. but i'd be really aware that the market should take a breather at some point in ime. the higher it goes without taking that breather, the bigger the decline is going to be on the other side. >> how big of decline do you think that could be? >> i think it's going to be somewhere between 10% and 15%.
3:07 pm
as we continue to climb, we're going to see, you know, valuations come down. a lot of stocks, we're having trouble finding stocks that are great values still. i think that the really interesting thing is this activism that's going on about releasing these huge cash hoards companies have. >> to rick santelli, how do you read the mood of this market now, rick? especially bearing in mind that the volatility index, the fear indicator, the great market hedge that you guys trade there in chicago, is down to a six-year low right now? they're really trimming that hedge back right now. >> well, people feel that they're kevlar protected. why buy life insurance if you believe your health has never before been better thanks in large part to some fed programs and in some small part to an actual growing economy. yeah, nobody's buying insurance.
3:08 pm
all these great things about stocks are, indeed, true. but contemplate this. if you look at a chart today, 207 was our high yield on tens. we might eke out a new high close at 206. current high close back to april is 2.04. we haven't been above 2.5% on a closing basis since august of 2011. we haven't been above 3% on a closing basis since early summer of 2011. so the real issuenamored with t if instantly we're at 3% how would all the metrics instantly change on how good equities look? >> we've got 35% higher profits, rick. >> hang on, lee. danny, would that be big competition if yields got that high? >> corporations still have a tremendous amount of money. they still have to deploy that money in one form or another. dividends have been on the increase. we've seen a lot of stock buybacks as well.
3:09 pm
but corporations aren't putting people to work anymore. i do think that that is what people are waiting for. people are waiting to see those jobs numbers increase before they get into the market. >> go ahead, lee. >> you know, first of all, that last point, you know, if you wait until everybody's fully employed and we get down to 4% or lower, that's when the market's going to be fully overpriced. and i would say that, you know, to rick's point there, you know, there's no other game in town than stocks. stocks earn a lot and we have 35% higher corporate profits than we did back in 2007. just because retail investors are buying right now, i don't think it means that the markets are devalued or stupid or wrong. i think people are starting to realize we have a third more profits. as long as when you say we have one job and you have 200 resumes, no inflation, no wage inflation. it's a good place. >> when you have stocks that are yielding more than the ten-year treasury, stocks have room to run. dividend yields are on the s&p about 2.2%. and so we think the market's got
3:10 pm
some leg here. >> so, lee, you're the most cautious on this panel. how significant a selloff are you expecting over the near term? in addition with you, don, i guess. 15%, you said. >> well, i'm -- i'm not thinking that we're going to see quite 10% or 15% though if it happened i'd be happy. what i think investors need to know right now is i have cash. i don't want to buy the dow or the s&p. i would look to some place like emerging markets which haven't had quite the run. they're still doing well. to deploy some capital in that. what investors out there need to do with cash is say if i need to get invested right now, know what i want to buy. u.s. emerging markets, for instance. but buy the thing that hasn't had quite the runup. if you look at emerging markets last two months they haven't been quite as wonderful as the u.s. just don't forget to buy the u.s. if we get a little dip. >> all right. >> just want to point out, bill, 45 s&p 500 companies have more than doubled in value just since the index's closing high at 1565. that was reached october 9th,
3:11 pm
2007. netflix, priceline. >> they have doubled in price. we'll repeat that again. thank you all. good to see you. thanks for joining us today. a lot of market winning streaks. we just highlighted one there. we've got some more to talk about in this final hour. courtney reagan breaking them down for us right now. >> that's right. bill, another winning day for the bulls. both the dow and s&p are up seven days in a row. in fact, this is the first seven-day winning week for the dow since march 15th, 2012. s&p 500 just ten points away from record high as it marches forward in the second longest winning streak this year. that's since the eight-day winning streak back at the end of january. it's also the only -- the second time in the last six years the s&p 500 has had a winning streak of at least seven days. 2013 has been a very bullish one for a number of big cap stocks. today four dow components at all-time highs. united technologies, walt disney, 3-m and johnson & johnson. it's risk on day for financial stocks. the number hitting multiyear
3:12 pm
highs from banks to insurers. the country's biggest mortgage lender wells fargo seeing shares trade at the highest level since october of 2008. citigroup shares trading at levels last seen april 2011. insurers like hardford financial services and genworth trading at 20 and 21 month highs respectively. behind the pure stock move the vix breaking below 12 for the first time intraday since april 20th, 2007. the key gauge of volatility has really fallen a long way from its intraday of, get this, 89.53 on october 24th, 2008. bill? >> courtney, thank you very much. so here we go. let's set the stage as we head toward the close with 50 minutes left in the trading day. any positive close for the dow another record high. the seventh consecutive up day for the dow and the s&p, which is now less than ten points away from an all-time high. >> records all around. the hunt for yield driving up shares of big dividend payers. some of those names now technology companies. something new is happening in this market. we'll have the names and what it
3:13 pm
means for investors coming up. also, the white house is warning china that its cyber hacking is threatening economic ties. former homeland security secretary michael chernoff will be here to react to that coming up next. general electric and the nfl teams up to improve player safety. should you team up with ge and add that hot stock to your portfolio? we've got the trade coming up on closing bell. stay with us. ♪ ♪ [ female announcer ] you're the boss of your life. in charge of long weekends and longer retirements. ♪
3:14 pm
ask your financial professional how lincoln financial can help you take charge of your future. ♪ how lincoln financial can help you take charge of your future. (music throughout) why turbo? trust us. it's just better to be in front. the sonata turbo. from hyundai.
3:15 pm
3:16 pm
oh, boy. let's get to mandy drury. breaking news affecting people of new york city in a big way, mandy. >> good news for those lovers of large sugary drinks. a new york state judge has invalidated new york city's ban on large sugary drinks. this ban was due to go into effect tomorrow, bill. that would have affected drinks 16 ounces and larger. cnbc has called the mayor's office and at this stage they do not have an immediate response. of course, we'll keep on that. in the meantime, the new york state judge says the limits basically aren't legal. looks like it's game on for those that like those big drinks, bill. >> my guess is mayor bloomberg's initial response would not be
3:17 pm
printable for a family audience. that would be my guess. >> i would like to be a fly on the wall. >> let's not forget, maria, this is not just a new york city story. implications around the country if this kind of ban were able to stick. the fact it's invalidated even before it gets started, very big for cities around the country watching this carefully. >> really interesting. we'll keep watching. thanks so much, mandy. a strong warning from the white house today to china about cyber attacks. eamon javers at the white house with the latest. >> hi, maria. white house national security adviser calling out china for cyber hacking. the white house national security adviser saying businesses are complaining about chinese cyber hacking attacks on an unprecedented scale. take a look at some of what he had to say today. this has become a key point of concern and discussion with china at all levels of government and will continue to be. the united states will do all it must to protect our national networks, critical infrastructure and valuable
3:18 pm
public and private sector profit. maria, the white house said today we can expect to hear from the president soon on cyber hacking. also unveiled just last month is a new effort to have u.s. companies cooperate with u.s. intelligence agencies to actually get some classified informatatioto u.s. teleconfirms to slow down some of the hacking attacks before they get to participating american companies part of what they're calling the critical infrastructure of the united states. a lot moving here on the front on cyber security, maria. >> eamon, thanks so much. reaction to the strong words from the white house directed at china. we got michael chernoff with us today. >> he is chairman of the chernoff group, global security advisory firm. former secretary of the department of homeland security. sir, good to have you on the program. >> good to be on. >> what do you make of the white house's comments and the approach thus far to increasing cyber attacks from china? >> i think it's overdue to have some strong public statements from our political leaders about
3:19 pm
exactly what's been going on which is a massive transfer of our intellectual assets from the united states overseas to places like china. there was a report just in the last few weeks from a private company that specifically laid responsibility for one set of attacks to a people's liberation army sponsored organization. i think that's just the tip of the iceberg. >> i'm going to ask a naive sounding question. why are they doing this? what are they after? aren't we partners in trade? do they not trust us? what do they want to know we haven't already told them? >> look at it this way. if you invest millions and billions of dollars in research, you test, you see what works and what doesn't work, and at the end you produce a product. if someone steals that and haven't made the investment they have the ability to underprice you, get to the market at the same time you do. you wind up at a competitive disadvantage. if you're worried about outsourcing jobs the biggest job outsourcing machine in the world
3:20 pm
is one that steals intellectual property systemic basis. >> do we have the ability to stop these attacks? ow come it's so difficult to rein this in? >> there are a lot of ways -- unfortunately it's not as simple as that. some of is better shares of information. the government has information. the private sector has information. we're stove piped. we haven't shared it the way we should. part of it is that there's a little bit of reluctance to challenge china. many of our companies view china as a market and so there's a he has the has tensy about getting aggressive with them. it's costing us billions of dollars in intellectual assets. >> there's a feeling it will be chinese executives. if they keep getting an earful from u.s. corporations about this, that it will be the chinese executives that go to
3:21 pm
the government and say this has got to stop at some point. that sounds naive to me. what do you think? is that the beginning of the lugs her solution here? >> that's going to be part of the solution. i've been at a number of public events recently where people including myself have been very outspoken to audiences that include chinese investors and businessmen about what's going on with intellectual property theft. what may happen these business people will go back home to china and they'll start to tell their government, look, we are going to be pushed out of global markets. we are going to be global pariahs if we don't agree to rein in what's been going on. i'm hoping some business pressure may be part of the solution. >> at least having the tools to put a dent in this. >> maria, you're right. you can't completely stop. you can't completely stop.
3:22 pm
you can reduce the risk. the energy sector. the electric sector. we've done a lot of work with them. they're doing quite a bit to protect themselves. the financial sector has long been pretty sophisticated about these things. there are other sectors that i think pay a lot of attention. what you worry about are some of the smaller organizations, smaller companies that may not have the assets or may not have the interest in investing in the necessary protection. and an interdependent world, if one part of infrastructure goes down it affects everybody. >> what do you think is behind this chinese minister of foreign affairs comment calling for a set of rules for cyber attacks among countries? that's the kettle calling the pot black if i ever heard it. >> i think a lot of it is an effort to kind of misdirect and suggest all we want to do is th particular attack comes from a particular source? what was useful about this
3:23 pm
report by this group and some other reports in the "new york times" and "the wall street journal" is that for the first time we're beginning to lay the responsibility at the door of chinese actors. and it's not only china by the way, other countries gain in this too. and that's the beginning of accountability when you clearly call out the people who are committing the wrongful acts. >> all right, we will leave it there. thank you so much. >> good to be on. >> we'll see you soon, thank you so much. 40 minutes before the closing bell, we are in record territory again. the dow jones up 32 points 14,429. >> shares of general electric are up more than 20% over the past year. double the dow's performance in that time. and now the company is working with the national football league. a story -- we look if there's still room to make money if you bought ge stock today. also, first they took aim at jamie dimon, in you activist
3:24 pm
investors are trying to discipline the chairman of sold beg gold began sacs of his role. ♪ twith blackberry hub10 and flick typing. built to keep you moving. see it in action at a talking car. but i'll tell you what impresses me. a talking train.
3:25 pm
this ge locomotive can tell you exactly where it is, what it's carrying, while using less fuel. delivering whatever the world needs, when it needs it. ♪ after all, what's the point of talking if you don't have something important to say? ♪ if you don't have something important to say? we replaced people with a machine.r, what? customers didn't like it. so why do banks do it? hello? hello?! if your bank doesn't let you talk to a real person 24/7, you need an ally. hello? ally bank. your money needs an ally. arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap.
3:26 pm
it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. february february nonfarm payrolls increased by 236,000 jobs. >> when we finish with the cliff the government gets out of the picture, look what happens, isn't it terrific? >> what a week, the dow, s&p 500 up every day this week. the dow continuing to hit all-time highs. general electric shares are a bit lower today on a downgrade. but the stock has been on a great run for the last year or so. and now ge is teaming up with the national football league to help improve player safety. mary thompson with details on that story.
3:27 pm
>> the ceo of the country's biggest industrial firm involved in a venture to protect, diagnose concussions. our goal is to better diagnose, to treat, and to prevent brain injury. >> the nfl has such a great convening force and such a great brand but this will be felt? athletic is. it's going to be felt by the military, by people who experience accidents. this is going to be felt broadly in the health care system. >> ge's work on imaging, especially work to detect alzheimer's. ge and the nfl giving $40 million a year for a research project to improve imaging to detect and monitor concussions and aftereffects. under armour joining them to give money for promising ideas for protecting the head, part of the nfl's campaign to improve safety. after denying a link between
3:28 pm
concussions and chronic diseases like dementia and depression it's changed its tune. with a reputation taking a hit from lawsuits claiming the league has been negligent about injuries, the nfl seeking to better protect and diagnose those players who have taken a big hit themselves. part of the reason ge shares are lower is downgrade a stock to a neutral down to a buy. analysts telling clients it's downgraded because of valuation. the stock has been on fire, up 12% year to date. is it too late to buy ge? on the technical side of the story is steve cortez with vera cruise. good to see you. let's start with the chart, carter. the stock up 12% this year alone. how does the technicals look? >> i've got two charts. the first is a daily chart and what appeals to my eye is the very orderly nature of this graph. it's been a nice one, two year ascent. the longer term chart, the second chart is really what's
3:29 pm
appealing. there's a lot of asymmetry. this stock is nowhere near its '07 highs. 23, 24. whereas most large cap stocks of this ilk are at their' eight 7 highs. we think it's asymmetrical. >> what do you think, steve? >> i think it's curious logic to say we want to buy a stock because it is so underperformed the market. ge has. they're talking about the nfl, the concussions. ge's long-term shareholders are the ones who have had a financial concussion by owning this stock. it would need to double from here to get back to its all-time highs even though the dow jones is right here. but for the near term, looking forward, i think the biggest obstacle to ge is the fact that it is so exposed to europe. the last time we saw ge fall precipitously was last fall and the main reason was because of foreign exchange fluctuations. the dollar had a massive rally in february, just now in recent weeks, and i think that is a problem for ge.
3:30 pm
my guess is we're going to see more come out of ge soon. >> you want to sell to my strength? >> yes or at least if you want to have an industrial conglomerate you're better off in other names that have fared better or even the s&p. i'd much rather be in unite the technologies if you want to be in this space for instance than in ge the laggard. >> steve makes a got point but that's a function of its being treated as a financial. in '07 it was correlated with the s&p financial sector. it is not a financial anymore. we think you've got a market-type stock with attractive dividend and asymmetry in terms of upside potential versus downside risk. what downside do you see? >> i don't know because lately it has been correlated with the s&p, lately as a trader what do you think of ge? it's what do you think of the s&p? it's hard to get too excited about buying the s&p or ge when we have the vix at five-year
3:31 pm
lows. there is a lot of excitement about the market, about ge, because of that, because it has lately been extremely correlated with s&p. that excitement gives me pause, tells me this is a time to not be excited and to be careful. >> would you put new money to work here, carter? >> certainly. in fact, in the event of some sort of market give-back, and we're very much positioned for that, we think ge would be an outperformer. because just as steve has said, it hasn't gone as parabolic as the others. >> gentlemen, thank you very much. we'll see you soon, thank you. >> we just learned, i guess there an s.e.c. filing, ge's ceo received compensation last year of $25.8 million compared to $21.6 million in 2011. so a nice raise. >> sure is. there's a chart at 2358 on ge. 30 minutes before the bell, we're in record territory, up 30 points, 14,426.
3:32 pm
>> it has been talked about for a while. are we starting to see signs of a rotation out of bonds into stocks? rbc wealth management ceo john taft will be here to tell you what he's telling his clients to do. >> greater and even more powerful after a box office hit this weekend. >> you're in oz. i'm the good witch. >> where's your broom? >> you don't know much about witches. >> "oz the great and powerful" dominating the box office with an $80 million debut, what is next for disney and this red hot stock? bob iger will join me tomorrow to talk about that, star wars rumors, and in harrison ford will be back in action as han solo. don't miss it tomorrow with bob iger. tdd#: 1-800-345-2550 when i'm trading, i'm so into it, tdd#: 1-800-345-2550 that i haven't even looked away from my screen. tdd#: 1-800-345-2550
3:33 pm
tdd#: 1-800-345-2550 that kind of focus... tdd#: 1-800-345-2550 that's what i have when i trade. tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 and the streetsmart edge trading platform from charles schwab... tdd#: 1-800-345-2550 ...helps me keep an eye on what's really important to me. tdd#: 1-800-345-2550 it's packed with tools that help me work my strategies, tdd#: 1-800-345-2550 spot patterns and find opportunities more easily. tdd#: 1-800-345-2550 then, when i'm ready... act decisively. tdd#: 1-800-345-2550 i can even access it from the cloud and trade on any computer. tdd#: 1-800-345-2550 with the exact same tools, the exact same way. tdd#: 1-800-345-2550 and the reality is, with schwab mobile, tdd#: 1-800-345-2550 i can focus on trading anyplace, anytime... tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 ...until i choose to focus on something else. tdd#: 1-800-345-2550 all this with no trade minimums. and only $8.95 a trade. tdd#: 1-800-345-2550 open an account with a $50,000 deposit, and get 6 months commission-free trades. tdd#: 1-800-345-2550 call 1-800-578-4439 tdd#: 1-800-345-2550 and a trading specialist tdd#: 1-800-345-2550 will help you get started today.
3:34 pm
[ chainsaw buzzing ] humans. sometimes, life trips us up. sometimes, we trip ourselves up. and although the mistakes may seem to just keep coming at you, so do the solutions. like multi-policy discounts from liberty mutual insurance. save up to 10% just for combining your auto and home insurance.
3:35 pm
call liberty mutual insurance at... to speak with an insurance expert and ask about all the personalized savings available for when you get married, move into a new house, or add a car to your policy. personalized coverage and savings -- all the things humans need to make our world a little less imperfect. call... and ask about all the ways you could save. liberty mutual insurance -- responsibility. what's your policy? welcome back. rocking market in stocks where many individuals have flocked to safety the past few years. our next guest has seen them rotate money out of cash and some out of bonds and into equities. >> a strategy being advocated by him. john taft back with us, oversees
3:36 pm
$247 billion. you're in the feeling -- we've talked about fear on wall street for a while now. and the fear was of losing money. but you think that fear is slowly becoming the fear of missing out on this rally? >> that's what's keeping individual investors awake is they may have missed some kind of train. so we are seeing activity in our individual client accounts, mostly out of cash, starting to get into the market. in equities. >> is it getting too late at this point to get in if you haven't gotten in already? are you recommending that folks do rotate some money into stocks? >> we've been telling investors for the last 18 months to get to a benchmark weighting inni equities, 55% of your portfolios in stocks. it's the rare investor who doesn't have some money in stocks. the issue right now is, is this a bad market to get from wherever you are, whatever percentage of your portfolio is in stocks, to a benchmark weighting of stocks? we don't think it as bad time to do that. really, the key is, is there a
3:37 pm
risk of recession? that's what would tip this market over. and we don't see it, looking forward. there are headwinds but this is an economy that's healing underneath the surface, so the headwinds are tolerable. >> the two prevailing ideas we get lately, one, that this is the beginning of a bull market for a generation, that the valuations are there, the economy's recovering, the fed's on the job, and it's time to really look at equities in a big way. the other one is the fear, again, that word, about what the fed's going to do when they have to start reining in all that liquidity and we could see a spike in bond yields and stocks would have to go lower again. >> that particular risk, the risk of a 1994 type of sudden 100 basis point plus jumps in rate, we don't see that. we don't see that kind of a risk in the marketplace. the other thing is, let's not forget there are a lot of headwinds out there which could dissipate over time. the biggest of which is the fiscal uncertainty in washington, d.c. there is a possibility that we
3:38 pm
may not have a grand bargain but we could have some kind of constructive policy response in washington. and if that happens, it lifts one of the major clouds over the marketplace. >> so you think if we actually have some kind of a compromise, investors will pile into stocks even more? >> absolutely. >> and are this areas that you see folks going to more so than others, in other words, dividend payers, technology, sectors that you see are of particular interest? >> yeah, our boring and consistent advice is gi dividend-paying stocks. it's the perfect investment for individual investors in this environment. you get paid while you wait. you get the opportunity to have companies increase their dividend over time. we have a portfolio of 20 dividend-paying stock records three of them have increased their dividends every year for the last 50 years. johnson & johnson. procter & gamble. and 3m. at&t has paid dividends for the last 100 years. finally, you have a chance at capital appreciation, a trifecta for individual investors.
3:39 pm
>> you got 32% to bonds in this model portfolio. but you're shortening the der race? >> and staying with high quality. one of the things that's happening is a lot of corporations have been issuing bonds so credit spreads have gotten very tight. you're buying lower-quality bonds you have a chance to get in trouble. >> 10% cash? what are you waiting for? >> actually what you're waiting for is some kind of a correction. you want to have some powder dry in the event, which is entirely possible after a 20% run-up since last summer, that the market corrects. that would be a time to buy into the equity markets. >> in terms of participation, volume every day anemic, low numbers all the time. who is really participating in this? is this institutions or the retail investor this. >> we've seen a lot of -- i've told you, we've seen a lot of activity this year in our retail client group. so investors are active. our daily transaction revenues, the businesspeople are doing buying and selling stocks and bonds, up about 15% to 20
3:40 pm
percent over last year at this time, they're active. >> is it just the u.s. market you're looking at? i can't imagine. you're looking overseas too? >> unfortunately, you know, most americans are parochial in their investment outlook. there are a lot of american companies that are doing business overseas, like mcdonald's, over half their revenues come from overseas. you can buy foreign markets by buying quality american companies. >> john, good to see you again. >> thank you. >> thanes so much, john. >> rbc wealth management ceo. heading toward the close, 20 minutes left in the trading session, the dow up 23. that would give us a record there. the s&p is still about 13 points away from an all-time high. >> retail investors no longer shying away from 401(k)s in this rally. interesting data out on how often we are now checking those balances that have been growing with this market coming next. >> wait a minute, i need to take care of that in just a moment. south by southwest has become much more than a music festival. it's now become the place for
3:41 pm
cutting-edge technologies like twitter and foursquare to take off. corporate america is taking notice big-time. which companies are there and what they are hoping to find. the patient, presented with a hairline fracture to the mandible and contusions to the metacarpus. what do you see? um, i see a duck. be more specific. i see the aflac duck. i see the aflac duck out of work and not making any money. i see him moving in with his parents and selling bootleg dvds out of the back of a van. dude, that's your life. remember, aflac will give him cash to help cover his rent, car payments and keep everything as normal as possible. i see lunch. [ monitor beeping ] let's move on. [ male announcer ] find out what a hospital stay could really cost you at
3:42 pm
could lose tens of thousands of dollars on their 401(k) to hidden fees. thankfully e-trade has low cost investments and no hidden fees. but, you know, if you're still bent on blowing this fat stack of cash, there's a couple of ways you could do it. ♪ ♪ or just go to e-trade and save it. boom. ♪ but at xerox we've embraced a new role.
3:43 pm
working behind the scenes to provide companies with services... like helping hr departments manage benefits and pensions for over 11 million employees. reducing document costs by up to 30%... and processing $421 billion dollars in accounts payables each year. helping thousands of companies simplify how work gets done. how's that for an encore? with xerox, you're ready for real business. here's my take. it's a bunch of crony capitalism, that stuff never works. it's more of the same from mr. obama. >> he patriate foreign earnings of american corporations.
3:44 pm
this is "the kudlow report." remember the old saying, don't bring me the paper unless the news is good? turns out that rule may apply to 401(k) investors. jane wells explains. >> well, bill, it's 3:42 on wall street, have you checked your 401(k) today? 5.6 million unique visitors hit online trading sites the first week of march, up 5% from the week before, up 46% in six months. people like reid rucker. >> they're all up. it's good. >> here he is checking his retirement accounts more frequently and moving money out of muni fund bonds into equities. >> i've never been trading in a market where the fed is this involved in the market, and i don't know what to expect when the accommodation that the fed has in place starts to wear off. >> well, join the club. wealth strategy adviser mark is
3:45 pm
seeing similar concerns develop telling investors, it's not about timing the market, it's about time in the market. the volume of calls has definitely picked up. amongst my clients. whether these relationships have been short-term or as long as ten years. >> on twitter we're hearing from a lot of people. @tommyjshort says, moved half of my 401(k) from equities to money market last week, got a bad feeling. a counter, added more risk to my portfolio, as long as big ben is here, so am i. >> that's the big fear. when you start looking at the retirement plan account more frequently, the temptation is there to trade it more frequently. you're either going to get out, as you become closer to where you used to be four or five years ago, or you're going to take on that more risk as one trader was saying. >> rather than putting it aside and looking at it for the long-term and leaving it there. in the final stretch, 15 minutes before the closing bell sounds
3:46 pm
on wall street. a market that is high in uncharted territory, up about 30 points on the dow industrial. >> the dow and the s&p minutes away from a seven-day winning streak. huntington asset advisers thinks this rally may be running out of steam. the naysayers have been wrong so far. why is it different this time? we'll find out. the very blunt truth is that men still run the world. >> what about the women's revolution? >> i think we're stalled. >> is facebook cfo cheryl sandberg right? home shopping network ceo mindy grossman joins us to talk about women and work. [ male announcer ] you are a business pro.
3:47 pm
omnipotent of opportunity. you know how to mix business... with business. and from national. because only national lets you choose any car in the aisle. and go. you can even take a full-size or above. and still pay the mid-size price. i could get used to this. [ male announcer ] yes, you could business pro. yes, you could. go national. go like a pro. yes, you could. (announcer) scottrade knows our and invest their own way. with scottrade's smart text, i can quickly understand my charts, and spend more time trading. their quick trade bar lets my account follow me online so i can react in real-time. plus, my local scottrade office is there to help. because they know i don't trade like everybody. i trade like me. i'm with scottrade.
3:48 pm
(announcer) scottrade. voted "best investment services company."
3:49 pm
all right, what do you think? constitute rally be running out of steam? here we are minutes away from the seventh day win streak for both the dow and the s&p. but peter sorrentino from huntington advisers is getting cautious on stocks. he joins us. peter, why are you getting sweaty palms here? >> well, really we saw earnings momentum for the u.s. stocks begin to slow in the second half of last year. that picture really hasn't changed. equity prices are merely capitalized future profits. we've had a spectacular rally. granted, stocks were probably
3:50 pm
cheap last summer. we've pretty much discounted all of that now. unless we see a real acceleration of economic activity, stock prices are getting pretty close to what we think is near term fair value. we want to be cautious here. no need to chase this thing. we think there's a correction in the offing and we want to be ready for it. >> how do you be ready for that correction? when you say the value ations are getting up there, what would be your measure? price to earnings ratios? 15? what's the number? what's the magic number that feels expensive to you? >> really, anything in the mid teens. on a long-term basis is in our view pretty close to fair value. at this juncture, we've got a trading range on the market, 15.7 is our upside for the s&p, we're fairly close to that now. that to us on normalized profits looks to be about where we ought to be for this time in the economic psych tell. we're not wanting to chase this. >> what do you think? what's going on right now? what are you doing with it? >> i think you should chase it. there's a correction coming, so my strategy is buy.
3:51 pm
and what i mean by that is, i can't call the moment when there will be a pull-back, of course there will be a pull-back. the problem is, when people say, don't chase it, what's the starting conditions? are you sitting on a lot of cash? in the way the world looks to us, a lot of people are disillusioned. they're still being very conservative. they've waited out or sat out this big rally we've had over the last several years having sold at the bottom. point being is you can't sit there and wring your hands over gyrations in the market. as long as valuations are reasonable, and i would agree that mid teens are reasonable. but it's no reason not to buy. >> point well taken. but how much of a correction, assuming we get one at some point, how much of a correction are you willing to withstand, art, before you decide that that's enough and you've got to get out? >> no, indefinite. you know, because i'm not going to try to call the -- when the
3:52 pm
correction occurs. that saves me the responsibility of picking the bottom. >> peter, let me ask you this. if
3:53 pm
things, valuations are looking a little better. but remember, it's not about where the companies are, it's about where the customers are. you know, find the companies that are going after the growing markets. in the u.s. the consumer still is facing some headwinds.
3:54 pm
consumers in the u.s. are still deleveraging. again, if you're looking for growth opportunities, looking at folks that target overseas customers would probably be a better bet. here, companies that are more focused domestically, the value plays maybe look a little better. >> good to see you both, thank you for your thoughts, good stuff. mayor bloomberg is responding to that judge decision to halt the new york city soda ban. >> absolutely, quite a lot of details are coming out here, maria. for a starter, the new york state judge who invalidated that ban on large sugary drinks over 16 ounces and above is saying the ban would be unevenly and arbitrarily enforced and is capricious. the judge says quote-unquote, some but not all food establishments in the city, it excludes other beverages of significantly higher concentrations of sweeteners and or calories. the loopholes, including the
3:55 pm
fact that there are no limits on refills served, gut the purpose of the ban. here is the response tweeted out, sign of the times from the new york mayor's office. we believe @nychealthy has the responsibility to attack the causes of the obesity epidemic which kill americans every year. we are confident the measure will ultimately be upheld. those two tweets coming out from the new york city mayor's office in response. back to you. >> thanks so much. interesting that he tweets out his response. i love that. >> yes, well, that only gave him 140 characters to do something with there. you might imagine some of these companies might have responded that are involved in making some of these sugary drinks. so far, it hasn't happened. only coke is higher on an otherwise up day. pepsi, dunking brands, starbucks trading lower as we head into the close here.
3:56 pm
>> we're coming back with the "closing countdown." >> are activist investors going overboard, trying to strip some of wall street's most successful executives of their chairmanship role? dick kovacavich thinks they are. tomorrow i'll talk to somebody who knows a thing or two, boib iger retained both roles after activists weighed in for a split. "oz the great and powerful" as well as the latest on the new star wars trilogy and more. tomorrow, bob iger joining us live. zap technology. departure. hertz gold plus rewards also offers ereturn--
3:57 pm
our fastest way to return your car. just note your mileage and zap ! you're outta there ! we'll e-mail your receipt in a flash, too. it's just another way you'll be traveling at the speed of hertz. otherworldly things.
3:58 pm
but there are some things i've never seen before. this ge jet engine can understand 5,000 data samples per second. which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ and his new boss told him two things --
3:59 pm
cook what you love, and save your money. joe doesn't know it yet, but he'll work his way up from busser to waiter to chef before opening a restaurant specializing in fish and game from the great northwest. he'll start investing early, he'll find some good people to help guide him, and he'll set money aside from his first day of work to his last, which isn't rocket science. it's just common sense. from td ameritrade. two and a half minutes left in the trading session. here we go again. now, remember, this year, lately the dow and the stock market have been lower on mondays. last week we broke that precedent when we had five straight up days. now we've had six. it's actually seven going back to the previous friday. so here we are. another ti


info Stream Only

Uploaded by TV Archive on